Tuesday 20 October 2009 05.58 EDT
First published on Tuesday 20 October 2009 05.58 EDT

Diplomats involved in the Vienna talks on the possible export and processing of Iran's uranium have confirmed that Iran does not want France to be part of any formal agreement.

Their objection is based on their experience of being a 10% shareholder in a uranium enrichment plant in Drôme, Eurodif, that dates back to 1975 - the Shah era. The investment was made to provide Iran a steady supply of enriched uranium, but that supply has been denied to Iran under UN sanctions.

This is all history and the Iranians were well aware of it when they made an agreement in principle in Geneva on October 1, to send their low enriched uranium to Russia for further enrichment and then to France for fabrication into fuel for the Tehran research reactor. This may be more about punishing France for taking the toughest line on Iran in recent months.

The people I have been talking to say this is not a show-stopper. The formal agreement could be between Iran and Russia, and Russia could enter into a separate commercial arrangement with France, or the US could do the fuel fabrication.

The other tricky issues here in Vienna are - how much LEU Iran would hand over and when. The Iranians are pushing for a deal which would involve them handing over their LEU in smaller amounts than the 1200kg demanded by the US and France, or to hand it over in direct exchange for the reactor fuel only when it that fuel is ready for delivery. That undermines the whole point of the deal from the US and French point of view - to get most of Iran's 1650 kg of LEU out of the country for a few months to give diplomacy breathing space and reduce tension over Iran's accumulated stockpile.

Here at the IAEA headquarters in Vienna, all the negotiating teams have left the chamber and are holding smaller group meetings in their allotted rooms downstairs. This, say the optimists here, is a good sign. It means the real work is being done. That may just be spin, but there are still plans for the IAEA director general, Mohamed ElBaradei to make some public closing remarks some time this afternoon.

Update: Work is underway on drafting an Iranian-Russian bilateral agreement, but it is still not clear whether that would be acceptable to the French and Americans.